Argentina's currency, the peso, has fallen sharply on the currency markets after a one-week suspension of trading.

It was the first day banks opened and the peso was allowed to float freely since the failure of the government's dual-exchange rate system of fixed international rates and floating domestic rates.

Long lines formed at many banks, as Argentines fearing peso devaluation rushed to convert their cash into US dollars.

Soon after the markets opened, it took up to 2.5 pesos to buy $1, compared with the 2.05 pesos a week ago before the suspension of the market, reports said.

But by afternoon, the peso had recovered to a range of 1.9-2.2 to $1.

For the past 11 years, until the beginning of January, the exchange rate to the dollar had been fixed one-to-one.

Call for patriotism

Pascual Giancavelli, one of more than 100 people queuing at Cambio America, an exchange office, said there was far too much uncertainty: "I'm looking to dump my pesos as fast as I can."

"Would you want to be stuck holding pesos right now?", added the 37-year-old employee of an advertising company, who had just taken 1,500 pesos out of his current account.

Duhalde says currency speculators are unpatriotic

The free float of the peso is part of a restructuring plan aimed at restoring economic and social stability to a country racked by economic crisis and bloody street protests since the former government defaulted on debt payments late last year.

Over the weekend, President Eduardo Duhalde criticised currency speculators.

"There are campaigns, which are not very patriotic, that induce a rise of the dollar with no consideration for the fact it could be very dangerous for all producers and that it generates uncertainty," he said.

"They want to generate a climate of hyperinflation, saying the dollar will be at 10 pesos.

"It is absurd, but the problems of this country are fed by absurdity," Mr Duhalde said.

Dollar link removed

The peso's peg to the dollar ended a decade when the two currencies were interchangeable.

The banking restrictions angered many people

The peso has already halved in value since the peg was removed in January, and a dual exchange rate mechanism was introduced.

That mechanism was abandoned last week.

Currency traders had been forced to sit on the fence for a week while the foreign exchange market were closed.

Over the weekend, Mr Duhalde announced major constitutional changes to help restore political and economic stability.

Speaking on national television, Mr Duhalde said he intended to replace the existing presidential system with a parliamentary democracy.

The president said the changes would lead to an efficient and streamlined administration which would be more accountable to the people.

Spending cuts

Most Argentines blame the political system and politicians for leading them into turmoil and democratic reforms are likely to be welcome.

Economy Minister Jorge Remes Lenicov has also announced spending cuts designed to reduce the budget deficit, and the removal of curbs on some bank accounts.

On Wednesday, the president reached agreement with provincial governors to cut state spending by 1bn pesos in an effort to balance the country's books and release up to $20bn (£14bn) in international aid.

And on Sunday, Argentine newspapers reported that the foreign ministry has also vowed to chip in.

The cost cutting measures will force the closure of 21 embassies and 13 consulates around the world, and the ministry is reportedly mulling the sale of some of its buildings in New York and London.